The Rule Of Three

If this story pans out, it will be very, very good news for everybody who isn’t working for a cable or telco monopoly:

Seeking to keep pace with peers in the telecom and cable TV industries, DirecTV is building a network to offer its own wireless broadband services to consumers, according to two people familiar with the deal. These people say that DirecTV is working with EchoStar and seeking final bids from tower companies in a push to put the network together.

I’d love to see this happen. The more players in the broadband market, the better. Right now, most Americans are stuck with the no-choice of high-priced cable modem service from their local cable TV monopoly, or high-priced DSL service from one of the Bell monopolies. As a result, broadband pricing and service in the US has scarcely changed since it was first introduced in the late ’90’s; I’m paying the same monthly rate now that I paid in 1999, even as other telecommunications rates have plummeted. Two matched monopolies don’t have any incentive to cut prices, but add another independent player, and the rule of three kicks in.

Widely availabe high-speed wireless service would throw a monkey wrench into that comfortable (for the duopoly) setup, giving broadband from cable and the Bells the same deserved kick in the teeth that satellite television delivered to cable TV in the 1990’s.

I cut off BellSouth’s overpriced landline service over two years ago, which thanks to BS’s monopolist no-dry-line policy, means I’m stuck with cable modem “service” for broadband. Give me an excuse to cut that last cord, and I’ll be gone like a shot.

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This entry was posted on January 31, 2006 at 6:02 am and is filed under Pith. You can follow any responses to this entry through the RSS 2.0 feed.
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“High-priced” cable modems & DSL lines? Will, you don’t know what high-priced is. The US is still the cheapest place on the planet to get data in your home except for South Korea. I remember paying $50/month for 2Mb cable modem service in NJ two years ago.

Try living in a part of the world with a half-government owned monopoly as the only available data provider. You can get 512Kb DSL and $15/GB of traffic, or you can drop $700/mn for unlimited traffic.

“As a result, broadband pricing and service in the US has scarcely changed since it was first introduced in the late ’90’s; I’m paying the same monthly rate now that I paid in 1999, even as other telecommunications rates have plummeted.”

Huh? Last fall when I finally switched to DSL, I got it for 35% less than I’d been paying for dial-up. That was an “introductory offer,” of course, and the price will double after a year, but even the doubled price will be pretty good for the service. Somebody I know who has been using the same DSL provider for several years called the customer-service department to ask if they could give him some kind of price break because he was paying more than people who were just getting the same service. They said no, they couldn’t drop his price . . . but they could, and did, triple his connection speed for the same monthly charge.

The writing has been on the wall for at least a decade, if not more. Broadcast services are an inefficient and underperforming method of transmitting data from data producers to data consumers. For some time, it’s been fairly obvious to anyone paying attention that the future is in on demand “pull” distribution, in the fashion of the internet. Rather than having “channels” in the conventional sense, you would have content sources, each of which would have a pool of content you could pull from at arbitrary times. Thus, rather than having to, say, schedule out a block of time to watch your favorite show or movie when it comes on TV, you could simply schedule time when it’s convenient for you and download the show. There have been two major roadblocks to adoption of such a model: infrastructural inertia and overblown piracy concerns of the publishing industry. The first has, to date, been easier to overcome than the second, but things have been coming around at a steady pace despite both factors.

Consider the changes in viewing patterns we’ve seen over the last several decades due to the advent of pay per view, time shifting via VCR, tivo, and home video. Consider, for example, the increasing popularity of viewing TV series on DVD. Obviously, there is a huge demand here, a demand which is, today, a multi-billion dollar industry. Moreover, companies like Apple have been popularizing and legitimizing the online distribution of media, helping to defuse the excessive piracy fears of media publishers.

And, of course, the transformation of dedicated systems information services (e.g. TV channels, radio internet, phone, etc.) into information applications running on top of generic data transport infrastructure is a healthy sign. Both from a redundancy and a competition standpoint. It’ll be fun to watch how all this stuff develops.

I wrote about this about 2 weeks ago, in response to a piece on BusinessWeek, with a post called Leapfrog. I’m interested News Corp.’s attempt to bypass the massive capital expenditure of laying wire, which should help it with competitive pricing.

Will, try living in a rural setting where even dial-up speeds don’t exceed 28.8 on a good day, and both DSL and cable are not available.

Current satellite broadband options are expensive and exceedingly unreliable, the worst of both worlds.

Even the new initiative will likely rely on ground-based towers and will therefore have huge regional coverage-less gaps. Sigh.

While since moving to the present home I really, really miss a cable modem, where I experienced surprisingly good service, there are no regrets about living beyond the reach of the convenient broadband. Life has its priorities offline as well as in the online community.

Satellite broadband is ridiculous. It’s more expensive usually than cable or DSL, and it’s much slower. It usually peaks out at 400kbps, and you still have the issue of lag times. If you do any real-time data communications (gaming, VoIP, etc), the lag from satellite is unusable.

Consider this: your data request leaves your dish as a radio wave travelling at the speed of light. However, instead of travelling to the nearest cell tower or some such, it has to travel roughly 46,000 miles to the nearest satellite. Then it travels from there, another 46K miles to the network center, to be routed to the internet.

Now, when your data returns, it has to be routed to the network center, then sent through the same 92K mile radio pathway to finally reach your computer. That means your data is travelling 184,000 miles before it even hits the internet, leaving lag (or latency) times of 1 second. No thanks.

Satellite broadband is expensive and it has occasional downtime. But out where I live, the telephone company can barely connect my dial up at 14.4Kbps, and talk about unreliable. When it rains, connect speeds drop to 7k (that’s not a typo – it’s seven). Ask telco about DSL and they quickly change the subject.

So, I don’t mind paying 60 bucks a month for satellite. I wish it were cheaper and that I had alternatives, but at present I am happy with satellite. They are a life saver for us rurals who need broadband access, whatever its limitations.

Seppo, you beat me to it – I also live in the sticks, where there is no cable except along the (relatively) high density state highway, no DSL except along the state highway, and even cell service is restricted to Verizon (or whatever they’re calling themselves this week) since they have the only tower in range.

And until broadband is available I’m not pining for it, nor will I even consider moving to a higher density population area just to get it. Other quality of life considerations trump high speed internet for me. I figure eventually there will be some tech breakthroughs that will destroy the stranglehold monopolies hold on telecommunications in many parts of the country (no thanks to Judge Green and the Bell breakup in the eighties).

I was involved in a similar effort by DirecTV and its former affiliates years ago. This effort has some technical difficulties relating to sending the signal back (in fact they had a service where the page downloaded from satellite and the user’s commands ie, clicks, were sent by dialup), but in any event this technology is LONG OVERDUE.

I had DSL from the eponymously named DirecTVDSL service a couple of years ago. They were wonderful. Unfortunately, they decided to go out of business about 6 months later. After allegedly being switched to Verizon DSL, after 3 weeks of talking to them on the phone for 2 hours every couple of days, they were unable to confirm that I’d ordered service from them. I switched to a cable modem the next day.